Sample Category Title

USD/CHF –  0.9888

 
Although the greenback retreated after meeting resistance at 0.9978, as the strong rebound from 0.9735 signals correction from 1.0039 has ended there, reckon downside would be limited to 0.9800-10 and bring another rise later, above said resistance at 0.9978 would add credence to this view, bring further gain to 1.0000, break there would confirm upmove has resumed for retest of 1.0039. Looking ahead, a break of 1.0039 would confirm early upmove from 0.9421 low has resumed and extend headway to previous resistance at 1.0100.

Our preferred count on the daily chart is that early selloff to 0.9630 is an end of the larger degree wave III and major correction is unfolding from there with a leg ended at 1.2298 (Nov 2008 with (a): 1.0625, (b):1.0011 and (c):1.2298), wave b ended at 0.9910 with (a): 1.0370, (b): 1.1967, (c): 0.9910. The rise from there to 1.1730 is the wave c which also marked the end of wave IV and wave V has possibly ended at 0.7068.

On the downside, expect pullback to be limited to 0.9830-35 and 0.9800 should hold, bring another rise later. Only below said support at 0.9735 would abort and signal the corrective fall from 1.0039 top is still in progress and may extend weakness to 0.9705 support, then towards 0.9640-45 but reckon previous support at 0.9589 would hold from here, bring rebound later. 

Recommendation: Hold long entered at 0.9850 for 1.0050 with stop below 0.9750.

Dollar's long-term downtrend started from 2.9343 (Feb 1995) and it was unfolding as a (A)-(B)-(C) with (A): 1.1100, (B): 1.8310 (26 Oct 2000), then followed by another impulsive wave (C) with wave III ended at 0.9630 (Mar 2008). Under this count, correction in wave IV has possibly ended at 1.1730 and wave V already broke below support at 0.9630 and met indicated downside target at 0.7500 and 0.7400. The reversal from 0.7068 suggests the wave V has possibly ended and the breach of resistance at 0.9595 add credence to this view and indicated upside target at 1.0000 had been met, however, the sharp retreat from 1.0296 to 0.7401 suggests choppy trading would be seen but price should stay above said record low at 0.7068.

EUR/USD

Current level - 1.1820

The outlook is negative after the unsuccessful breakthrough of the resistance level at 1.1843 for test of the support level at 1.1712. In positive direction a breakthrough of the resistance level at 1.1843, might lead to the next resistance level at 1.1939.

USD/JPY

Current level - 112.72

The forecast is negative for test of the support level at 111.95 and after that at 110.81. In positive direction only a breakthrough of the resistance level at 114.00 might lead to increase of the price.

GBP/USD

Current level - 1.3429

The outlook is positive for test of the resistance level at 1.3550. In negative direction a breakthrough of the support level at 1.3314, might lead to another decrease and test of the next support at 1.3200.

The pair stands deeply in daily cloud on Thursday and consolidating after previous day's strong fall (the biggest one-day loss since 22 Nov).

Bears found footstep at 112.46 where daily Kijun-sen contained Wednesday's post-Fed acceleration, with limited upside action seen ahead of fresh attempts lower as

Wednesday's long bearish candle continues to weigh.

Recovery was so far capped by broken converged 10/55SMA's which previously acted as strong support, with extended upticks expected to stall at 113.00 zone.

Fresh bearish acceleration through 112.46 handle would look for next targets at 112.30 (50% retracement of 110.83/113.74 / weekly cloud top) and 111.95 (Fibo 61.8% of 110.83/113.74) break of which would further inflate bears and signal an end of recovery phase from 110.83.

At the upside, daily cloud top marks key barrier (113.51) and only break here would neutralize downside threats and turn focus higher again.

Res: 112.88, 113.00, 113.51, 113.74
Sup: 112.46, 112.30, 111.95, 111.52

The Euro strengthened against the US Dollar, as most of the releases matched expectations on Wednesday. The EUR/USD currency pair added 28 pips, to continue appreciation and reveal one more 22 pips jump, following the Fed interest rate decision.

The Labour Department stated that the US consumer prices slowed growth to 1.7% year-on-year in November, held down by a strong decrease in apparel prices and weak costs of healthcare, which is likely to determine the pace at which the Fed hikes rates next year. Later, the Federal Reserve announced its decision to raise rates to 1.50% from 1.25%, as widely anticipated, but kept future projections unchanged, despite a possible short-term jump amid Trump’s proposed cuts of tax.

The Sterling fell sharply against the Greenback on the data showing lingering weakness in the UK employment growth. The GBP/USD exchange rate lost 22 pips to continue the wide-range fluctuation until the US reports put it back to the 1.3360 mark .

The number of employed people in the UK dropped again in October, indicating that employers were turning more cautious ahead of Brexit. Meanwhile, pay growth accelerated slightly, remaining lower than inflation. The Office for National Statistics reported that the unemployment rate held at historical low of 4.3%. The Bank of England hiked rates last month, expecting that stronger job market could boost wage growth, though today it is widely expected to keep rates on hold.

GBP/USD – 1.3427





New strategy :

Stand aside

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As cable found good support at 1.3303 and has staged a strong rebound, suggesting low has possibly been formed there and upside risk remains for further gain to 1.3460-70, however, reckon resistance at 1.3521 would limit upside and bring further consolidation. Only a break of 1.3521 would suggest the correction from 1.3550 has ended, bring retest of this level later. Looking ahead, a break of 1.3550 would extend the rise from 1.3027 low to 1.3595-00, however, reckon recent high at 1.3658 (Sept high) would hold from here due to near term overbought condition, bring retreat later. Our preferred count is that (pls see the attached chart) the wave IV is unfolding as a complex double three (ABC-X-ABC) correction with 2nd wave B ended at 1.2774, hence 2nd wave C could have ended at 1.3658.

On the downside, whilst pullback to 1.3350-60 cannot be ruled out, said support at 1.3303 should remain intact, bring another rebound later. Only a drop below said support at 1.3303 would revive bearishness and extend the fall from 1.3550 for retracement of recent rise to 1.3250-60 but previous support at 1.3221 should remain intact, bring rebound later.

Our preferred count on the daily chart is that cable's rebound from 1.3500 (wave (A) trough) is unfolding as a wave (B) with A ended at 1.7043, followed by triangle wave B and wave C as well as wave (B) has ended at 1.7192, the subsequent selloff is the larger degree wave (C) which is still unfolding with minor wave (III) of larger degree wave 3 ended at 1.1986, hence wave (IV) correction is in progress which could either be a triangle wave (IV) of a complex formation but upside should be limited to 1.3500 and price should falter well below 1.4000, bring another decline in wave (V) of 3 for weakness to 1.1500, then 1.1200. 


After forming an inverse head and shoulders pattern and bouncing off from the weekly S2 at 1,235.93 the yellow metal managed to advance by 1.23% against the buck. In daily perspective the surge the is expected to last until the rate makes a new rebound either from the 1,263.63 resistance level or from a combination of the 200-day SMA and the 38.2% Fibonacci retracement level at 1,268.00. However, through the day the soar is likely to be stopped by release of information on the American Core Retail Sales. In this sense, there is a need to take into account the resistance zone formed between the 1,259.00 and 1,259.32 marks and support zone located between the 1,254.00 and 1,253.62 levels, which are likely to squeeze the pair for some time.

Due to interest rate hike by the Federal Reserve, the currency exchange rate got a downside momentum, which lasted until the pair reached the last combined support level formed by the weekly S1 and the 50% Fibonacci retracement level at 112.45. A successful recovery of the buck looks unlikely, as the rate will need to cross a combination of the weekly PP, the 200-hour SMA and another 50% retracement level near the 113.00 mark. In addition to that, the northern side is strengthened by the falling 55- and 100-hour SMAs. From the opposite direction, the pair, in contrast, faces no notable support levels up until the 112.10 mark. In support of this assumption, majority in pending orders in 100-pip range are set to sell.

Despite the pressure from three moving averages as well as from other technical indicators, the pair ended the day near the 1.3420 mark.

Today the cable is expected to continue the rally due to absence of any notable barriers on its way up until the 50% Fibonacci retracement level located at 1.3485. In case of appreciation of the buck, a combination of the weekly PP and the 200-hour SMA or the monthly PP and the 100-hour SMA should constrain the downfall.

However, these support and resistance barriers might be relatively easy broken due to the upcoming Bank of England meeting as well as release of information on the UK and US Retail Sales.

As the currency rate was falling the last three weeks in a row, traders used the Federal Funds Rate hike to sell the Dollar and elevate the pair to the 1.1844 level. As long as market sentiment remains predominantly bearish the rate is expected to continue moving in southern direction. As for today, a deep plunge back to 1.1776 seems unlikely, as this road is obstructed by the weekly and monthly PP as well as the 200-hour SMA. From this perspective, the pair most probably will make another rebound and resume the upward movement towards the upper boundary of a medium-term descending channel. However, there is a need to take into account an effect from today’s ECB meeting and American data release, which are likely to alter the above scenario.